In the graph on the right, the demand fro syrup has changed... The hint says to

Question

In the graph on the right, the demand fro syrup has changed...

The hint says to use the midpoint formula but for what two points?

The Formula for CPED is the percentage change in quantity demanded for one good divided by the percentage change in price of another good.

The answer is not -1.67

In the graph on the right, the demand for syrup has changed because the price of frozen waffles has risen from $3. to $3.5 per package. The cross-price elasticity of demand between frozen waffles and syrup is (Use the midpoint formula and enter your response rounded 1 two decimal places. Be sure 1 include the minus sign if necessary.)

Explanation / Answer

midpoint forumula of elasticity is

Q2-Q1 / ((Q1+Q2)/2)
------------------------------
P2-P1 / ((P2+P1)/2)

Numerator: (9000-7000)/((9000+7000)/2)

denominator: (3.5-3)/((3.5+3)/2)

Ans= 1.625

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